Because of the IRA, We Are Producing Fossil Fuels at Record Levels

Since President Biden signed the Inflation Reduction Act into law, Washington hypocrisy has been on display, with both sides politicizing the bill to gain a partisan advantage. On the far left, the administration has touted the bill as a transformational piece of green-energy legislation. On the far right, despite taking credit for fossil-fuel investments in their states, Republicans have assailed the act as the Green New Deal. That’s what people hate about Washington: Both parties mislead constituents to fit narratives. Our parties are tearing each other down instead of working together to build up America.

Let me be clear: The Inflation Reduction Act isn’t a red bill or a blue bill, and it sure isn’t a green bill. It’s an American bill. It accounts for the reality that our economy and everyday Americans will rely on fossil fuels for the foreseeable future while also diversifying energy sources. The law invests in cleaner production and use of fossil fuels while also advancing energy technologies of the future. It bolsters energy security while reducing emissions, tasks that can be accomplished simultaneously if done thoughtfully. This is the United States of America; we can walk and chew gum at the same time. 

Despite this administration’s best efforts to botch the law’s implementation, fossil-fuel projects are getting off the ground because of the act. The law enhanced the 45Q tax credit for carbon capture, utilization and storage—worth about $3 billion—to spur investment in power plants and industrial facilities fueled by coal and natural gas. With tax credits from the act, the Petra Nova carbon-capture project on a coal-fired plant in Texas restarted after sitting idle for three years. Enchant Energy Corp. in New Mexico and Minnkota Power Cooperative in North Dakota are installing carbon-capture technology at coal-fired power plants. These projects will add coal jobs while significantly reducing the plants’ carbon emissions—a win-win for energy security and emissions-reduction goals.

In Texas, BP plans to add carbon capture and storage for low-carbon hydrogen production to an existing facility. This will store up to 15 million metric tons of carbon dioxide a year, equivalent to removing about three million cars from the road. In Mingo County, W.Va., Adams Fork Energy will soon build a multibillion-dollar clean ammonia production facility. The project will support about 2,000 jobs during construction and is on a reclaimed coal mining site, honoring West Virginia’s legacy while building toward the future. Both projects are eligible for the law’s 45V tax credit—the first tax credit to encourage hydrogen production from fossil fuels with carbon capture, worth $13 billion across the hydrogen industry. 

As part of the Inflation Reduction Act negotiation process, Mr. Biden agreed to guarantee the Mountain Valley Pipeline’s completion. The pipeline will create 4,000 construction jobs and generate $50 million in tax revenue and more than $175 million in royalties for West Virginia landowners. It will open new markets for our natural resources, giving us new revenue sources and bringing down energy costs for our neighbors in the Southeast and developing industries.

The Inflation Reduction Act also mandated three important federal oil and gas offshore lease sales after the Biden administration arbitrarily canceled them. It also reinstated a fourth sale that a federal court invalidated. The law required the government to auction millions of acres of oil and gas leases before it can auction acreage for wind and solar farms—ensuring that we’re using federal resources without putting all our eggs in one renewable basket. The act has spurred 10 oil and gas lease sales so far, resulting in $564 million in total receipts to help balance our federal budget. Additional offshore and onshore sales are scheduled for next week. Overall, $239 billion in revenue from the act has gone directly to debt reduction.

Because of the Inflation Reduction Act, we are producing fossil fuels at record levels. Annual natural-gas production hit nearly 36 trillion cubic feet last year and is expected to exceed 37 trillion in 2023. We are on track to produce more than 4.6 billion barrels of oil in 2023, the highest annual production ever. In West Virginia, coal production rose about 5% last year and is up 6% compared with 2022 levels. Solar capacity additions are projected to total 25 gigawatts in 2023, more than double 2022 additions of 11 gigawatts. We also expect to add 9.6 gigawatts of battery storage, again more than double 2022.

Even my Republican colleagues acknowledged in a court brief that the act “balances diverse, complex, and overlapping considerations including growth and conservation, domestic needs and global positioning, and security and diplomacy.” 

I’m proud of the Inflation Reduction Act. It has increased domestic energy production, created jobs and reduced emissions. The energy investments range from wind and solar to oil and natural gas. This is the greatest country on earth, and we don’t have to choose between energy security and building a sustainable future for our children and grandchildren.

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